Revised budget surprises local health officials

NORTH COUNTY -- Gov. Arnold Schwarzenegger surprised many local
health officials last week when he decided to rescind proposed cuts
to state insurance plans for young and low-income Californians.

Health workers had expected deep budget cuts to key programs
that serve the poor, the young and the elderly in North County.

"I was very surprised. However, I'm still concerned," said
Barbara Mannino, the executive director of the Vista Community
Clinic, one of several health centers in North County serving
primarily low-income and uninsured patients.

A budget proposed by Schwarzenegger in January sent local health
providers looking for ways to cut costs. That proposal would have
reduced the amount the state planned to pay for Medi-Cal, a state
insurance program that serves one in five low-income Californians
and about 330,000 San Diego County residents.

The initial plan also would have capped enrollment in the
Healthy Families program, which provides state-funded insurance for
about 732,000 California children in families with low to moderate
incomes.

Those plans were scrapped by Schwarzenegger on Thursday when he
introduced a new budget, which will be considered by the
Legislature in the next several weeks.

The budget changes mean that the Vista Community Clinic will be
able to keep a teen pregnancy prevention program in Vista, Mannino
said.

Eliminating the teen pregnancy program in Vista was one way the
clinic anticipated cutting costs in light of the budget's effects
on its services.

"We had given notice to the landlord we thought we would be
leaving," Mannino said. "We called the landlord again this morning
to tell him we're staying."

Mannino said that of the 44,000 people who visited the clinic
last year, more than a third used Medi-Cal to pay for services.
About 3,000 used the Healthy Families program.

However, the new budget wasn't all good news last week for
programs that provide health care to low-income and uninsured
people.

Schwarzenegger's revised budget plan included a $72 million
reduction in state payments to health clinics, such as North County
Health Services, a network of community clinics in North
County.

North County Health Services is expected to lose about $900,000
a year in state funding due to a proposal to reduce a subsidy for
community clinics that meet federal guidelines in providing care
for the poor, Executive Director Irma Cota said Friday.

Cota said she and her staff are looking at possible cost saving
measures, including potential reductions in the clinic's hours of
operation, such as evening and weekend hours.

Scaling back plans to reduce spending on health care was a
concession Democrats, who control the state Legislature, sought as
they vowed to protect social services. The state's Healthy Families
program was among those spared.

Healthy Families was created as a safety net for families that
do not qualify for Medi-Cal but cannot afford private health
insurance. Families can enroll in the program as long as they earn
no more than 250 percent of the federal poverty level, about
$38,150 for a family of four. The program provides low-cost health,
dental and vision care.

Schwarzenegger in January proposed to cap the program at 732,000
people. That would allow only 20,000 people a month to enroll, the
same number of people that usually leave the program each month
because of age and income limits.

"We are very pleased with the wise choice that the
administration made … that kept the door open," said Isobel White,
senior policy associate with the Children's Defense Fund, which had
advocated against capping the program.

Health care in the state is among the fastest-growing areas of
the budget. Schwarzenegger's revised budget totals $102 billion and
provides $36.1 billion for public health services. The new proposal
adds $2 billion to health programs. The old plan would have taken
$1 billion from the state's budget for such services.

The January budget also proposed a 10 percent reduction in state
payments to doctors who take Medi-Cal patients. Some believed the
cut would have reduced the number of private doctors who would
continue to take low-income patients from the Medi-Cal program,
forcing many people to turn to more expensive emergency care.

"We're thankful that the people who could least afford health
care were spared by this budget," said Tom Gehring, the executive
director for the San Diego County Medical Society, which represents
physicians in the region. He added that more analysis of the budget
needs to be done to assess how it will affect doctors who care for
Medi-Cal users.

However, the continuing concern for many health providers is the
Schwarzenegger administration's proposal to overhaul Medi-Cal
itself, which would require a waiver from the federal
government.

The waiver would allow the state to frame its program to look
more like a private health insurance program. It would provide a
basic benefit package with fewer services for higher-income clients
and charge them a premium if they want the more comprehensive
package that lower-income patients would receive.

Under the waiver, the state could also require co-payments for
some non-emergency services. Schwarzenegger said the plan is still
in the works but was not complete at the time of his most recent
budget announcement.

"We had many, many meetings about it," Schwarzenegger said
Thursday at a Sacramento news conference. "We just couldn't do it
in that short period of time. There's no one obstacle or issue.
It's so complex, the whole thing."

Mannino of the Vista Community Clinic said similar waiver
programs in other states have discouraged people from enrolling in
the program. That means the state would save money now but would
likely pay more later when health conditions worsen and require
emergency room visits or prolonged hospital stays.

Thursday's revise did not include a proposed cap on Medi-Cal
enrollment for immigrants. A limit of 909,000 people on the program
would have saved the state an estimated $17 million, according to
the governor's budget proposal in January.

Health advocacy groups, such as the California Primary Care
Association, said such a limit would have created a waiting list of
almost 78,000 low-income immigrants and would have reduced revenue
for the community clinics that serve them.